Overpaid and Complaining

A few weeks back I took on our federal employees for being delinquent on their taxes to the tune of $1 billion. I received some criticism for that article, principally from readers who thought that government employees were being unfairly singled out. But just as that column appeared, the government confirmed what most knowledgeable people already suspected: federal employees are significantly overpaid.

In January, the Congressional Budget Office (CBO) released a comprehensive analysis of wages paid to federal employees. The report revealed that during the period of 2005-2010, federal employees were awarded much higher compensation than equivalent workers in the private sector. This doesn’t really surprise a lot of people, but the unfairness of this has not buried the media types.

Predictably, public-employee union representatives disputed the study, accusing the CBO of comparing apples and oranges because of an alleged mismatch in educational backgrounds and work experience. But, in fact, the CBO had defeated that argument by partitioning their analysis into five groups: high school diploma (or less), some college, bachelor’s degree, master’s degree, and professional degree or doctorate. Only the last of these groups fared better in the private sector; and, I suspect that if they separated out those with professional degrees, the analysis would show that federal employees with doctorates are also far better compensated than those in the private sector.

The report reveals that the lower your educational level, the better off you are working for the federal government. Those without a college degree get the best deal – a compensation package 36% higher than an equivalent non-government employee. For these folks, wages are 21% higher, and benefits a staggering 72% higher, than those in the private sector. All of which is paid for with your tax dollars, of course.

The analysis, however, appears to have omitted two things. While the accumulated benefits included health insurance, retirement benefits, and vacation pay, it’s not clear whether they contained sick pay and holidays, both of which are usually much more generous for federal employees. You might have noticed that public employee unions are the principal sponsors of legislation to impose generous sick leave, family leave, and holiday pay regulations on private sector employers. This is not an act of benevolence; it’s an act of self-protection.